The Citi panic is definitely on in full swing. After a 50 percent decline in the last few days, Citi's market cap has approached that of Goldman Sachs (which is itself down 25% this week). So guess who we're told Citi is considering making a merger proposal to?

That's right. We're told by a reliable source that Citi is talking, at least in a vague and non-definitive way, with Goldman Sachs about a potential merger or sale of assets. Both companies have suffered badly in the great flight of investors from anything with exposure to the investment banking industry. But Goldman has held up better than many competitors and is at least a plausible candidate for a Citi merger.

More likely than a straight merger, we're told by another source, is a sale of assets to Goldman Sachs. Ever since Goldman's transition into a bank holding company, there has been talk that the firm was looking to acquire commercial and retail banking assets. It could be interested in acquiring some business from Citi.

The other rumor about Citi is a potential merger with Morgan Stanley. Do either stories make sense? Doesn't Citi have access to both the Fed's discount window and the Treasury's TARP? We have nothing to add to that except our skepticism. Chickens. Heads cut off. Running.